PitchBook News - VCs pull back from foodtech

Forecasting investor-protective deal terms; the end of an era for SoftBank; Caribou joins unicorn herd; Inceptor Bio bags $37M
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The Daily Pitch: VC
May 23, 2022
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In today's Daily Pitch, you'll find:
  • Our latest emerging tech research provides a detailed look at the foodtech space, exploring why a decline in deal value and count could be the first step in a larger market recalibration.

  • A rebound in investor-protective deal terms could keep an increase in venture down rounds at bay.

  • Private equity investors cannot seem to get enough of European sports investments, but actions by some sports bodies underscore that PE money is not always welcome.
Today's Top Stories
VCs pull back from foodtech sector amid market recalibration
Venture funding for the foodtech industry fell in Q1, with $6.9 billion funneled into 359 deals, representing quarter-over-quarter declines of 41% and 13%, respectively. This may indicate the first step in a larger market recalibration, but the true impacts of the macroeconomic climate aren't yet visible in the data.

Our latest Emerging Tech Research takes a detailed look at the foodtech landscape, diving into emerging opportunities in areas like continuous glucose monitors for personalized nutrition and 3D food printers. The report also includes an ecosystem market map and league tables showing the most active foodtech accelerators, VC investors, strategic acquirers and more. Other highlights include:
  • Public market volatility contributed to a decline in exit activity in the foodtech sector, which recorded only two public listings and one buyout, a stark contrast to 2021.

  • Despite a funding dip, valuations continued to experience upward pressure. This resulted in record highs across all VC stages, with the greatest growth taking place at the early stages.

  • Meal kits waned in popularity during the mid-2010s but regained popularity at the start of the pandemic. Despite supply chain issues and inflation, Q1 saw several investments in the space, a possible indication that VCs continue to be optimistic about its market opportunity.
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Investor-protective deal terms may keep down rounds at bay
(Sezeryadigar/Getty Images)
Down rounds continue to make up a very small portion of venture capital deals, with just 5% of completed rounds in Q1 coming with a smaller valuation than a company's previous raise, according to PitchBook's latest US VC Valuations Report.

That figure could change in coming quarters if market headwinds persist. But before there is a significant growth in down rounds, venture-backed companies will likely see a rebound in investor-protective deal terms, said Kyle Stanford, a senior analyst at PitchBook.
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Europe's big sports deals: Governing bodies resist PE incursion
World Rugby chief executive Alan Gilpin
(Brendan Moran/Getty Images)
European sports have seen a wave of PE investment over the past three years, culminating in CVC Capital Partners' €2 billion (about $2.1 billion) LaLiga deal in January, but some sports bodies may resist future investment.

More deals are in the works, the most notable being Chelsea Football Club's £4.25 billion (about $5.23 billion) takeover, but with English soccer's Premier League looking to ban leveraged buyouts and World Rugby calling time on PE investment for now, fewer deals could materialize.
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SoftBank's losses signal the end of a VC era
(Tomohiro Ohsumi/Getty Images)
In recent years, SoftBank has become something of a totem for venture capital largesse. The firm has become VC's most prolific investor, backing iconic startup success stories—and some of the biggest failures.

Now, things are turning sour indeed. SoftBank's Vision Fund recently posted a record investment loss of 3.5 trillion yen (about $27 billion) for its latest fiscal year. The Japanese giant will likely survive this latest humbling episode, but it certainly feels like the end of an era, not just for the company, but also for the VC industry it has championed.
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Recommended Reads
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The story of how Dollar General quietly became the biggest US retailer by number of outlets. [Forbes]

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Quick Takes
  The Daily Benchmark  
  2020 Vintage Global Real Estate Funds  
  VC Deals  
  Caribou joins unicorn herd with $115M Series C  
  Inceptor Bio reveals $37M funding to support cancer treatment  
  Homethrive brings home $20M  
  Nikola Labs secures $20M  
  Dig exits stealth with $11M seed round  
 
 
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The Daily Benchmark
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VC Deals
Caribou joins unicorn herd with $115M Series C
Caribou has raised a $115 million round led by Goldman Sachs Asset Management, bringing the auto lending startup's valuation to $1.1 billion. Founded in 2016 and based in Washington, DC, Caribou offers an insurance comparison platform and connects car owners with lenders from credit unions, community banks and other financial institutions.
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View 10 competitors »
 
Inceptor Bio reveals $37M funding to support cancer treatment
Inceptor Bio, a biotech startup creating cell therapies for cancers that are difficult to treat, has raised a $37 million Series A led by Kineticos Ventures. The new funds will be used in part to support the completion of a cell and gene therapy manufacturing site in Florida.
View round
 
View similar company »
 
Homethrive brings home $20M
Homethrive has raised a $20 million Series B led by Human Capital, Axios reported. The Illinois-based healthcare services company offers a platform for unpaid family caregivers and their employers that provides personalized coaching, service coordination and more.
View round
View 10 competitors »
Nikola Labs secures $20M
Nikola Labs has raised a $20 million Series A led by G2 Venture Partners. The Ohio-based company's sensor network monitors manufacturing equipment to predict upcoming faults, enabling machines to be repaired before failure.
View round
 
View 4 competitors »
 
Dig exits stealth with $11M seed round
Tel Aviv-based Dig has raised $11 million in seed funding led by Israeli VC firm Team8. The company's cybersecurity platform offers real-time visibility, control and protection of data assets in the cloud.
View round
 
View similar company »
 
Chart of the Day
Source: PitchBook's 2021 Annual US PE Middle Market Report
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